The House of Representatives has passed four major tax reform bills—the Nigeria Tax Bill, Tax Administration Bill, Joint Revenue Board Establishment Bill, and Nigeria Revenue Service Bill—after they scaled third reading during plenary on Tuesday.
The bills, which were transmitted by President Bola Tinubu to the National Assembly on October 3, 2024, initially faced strong opposition, particularly from northern governors. They argued that the proposed reforms could disadvantage their region and called for a fairer implementation. However, in January, the Nigeria Governors’ Forum (NGF) reached a consensus on an equitable VAT-sharing formula, ultimately endorsing the bills.
The Senate passed the bills for second reading in November 2024, followed by the House of Representatives in February 2025 after extensive debate. The public hearing that followed saw pushback from stakeholders, including the Trade Union Congress (TUC), particularly over the proposed VAT increase.
One of the most contentious elements of the Nigeria Tax Bill was Section 146, which originally proposed a gradual increase in Value-Added Tax (VAT) from 7.5% to 12.5% between 2026 and 2029, with a further increase to 15% by 2030. This proposal was heavily criticised and later revised by the committee, keeping VAT at 7.5%—a decision the House approved.
On VAT revenue distribution, the initial proposal allocated 10% to the federal government, 50% to states and the Federal Capital Territory (FCT), and 35% to local governments.
Following committee recommendations, the states’ share was increased to 55%, reducing the federal government’s share to 10%, while local governments retained 35%.
With the House’s approval, the Senate is now expected to pass the bills, after which a harmonised version will be transmitted to President Tinubu for final assent. If signed into law, the reforms could significantly reshape Nigeria’s tax structure, revenue distribution, and fiscal policies.
